A key Byju’s investor has gone on record to express its disappointment in the edtech giant’s reporting and governance issue, just weeks after all the independent members quit the startup’s board. Prosus, one of the most prolific investors in India, said on Tuesday that Byju’s “reporting and governance structures did not evolve sufficiently for a company of that scale,” and it “disregarded advice and recommendations.”
Prosus, the largest external investor in Bengaluru-headquartered startup, said its director stepped down from Byju’s board after it became clear that “he was unable to fulfil his fiduciary duty to serve the long-term interests of the company and its stakeholders.”
Byju’s, which at $22 billion valuation is India’s most valuable startup, had earlier downplayed the reason why Sequoia India, Prosus and Chan Zuckerberg Initiative had quit its board, saying the directors “had to vacate” the board because their shareholding fell below the minimum threshold set in the shareholding agreement.
Full statement below from Prosus:
Prosus is a long-standing and committed supporter of Indian entrepreneurship, investing billions in India and collaborating with dozens of dynamic businesses and founders for nearly 20 years. While the companies and sectors we work with in India and across the globe are high-growth and rapidly evolving, our stakeholders rightly expect that we hold ourselves and our investee companies to the highest standards of corporate governance and reporting.
BYJU’S grew considerably since our first investment in 2018, but, over time, its reporting and governance structures did not evolve sufficiently for a company of that scale. Despite repeated efforts from our Director, executive leadership at BYJU’S regularly disregarded advice and recommendations relating to strategic, operational, legal, and corporate governance matters. The decision for our Director to step down from the BYJU’S Board was taken after it became clear that he was unable to fulfil his fiduciary duty to serve the long-term interests of the Company and its stakeholders.
BYJU’S sits at the intersection of India and Education, two very important and strategic areas of investment for Prosus. Although we no longer have a representative serving on the Board of the Company, we continue to believe in the potential of BYJU’S and its role in revolutionising access to quality education in India and around the world. As a shareholder, Prosus will continue to assert its rights, collaborating with other shareholders and government authorities to safeguard the long-term interests of the Company and its stakeholders.
Global auditor Deloitte also quit Byju’s last month, saying it had not received “any communication” from Byju’s on the status of “audit readiness of the financial statements and the underlying books and records for the year ended March 31 2022.”
More to follow.